Home Office Deduction Calculator

About this calculator

The IRS offers two ways to calculate a home office tax deduction for a space used regularly and exclusively for business: the simplified method, which allows a flat $5 per square foot up to 300 square feet (a maximum $1,500 deduction), and the actual-expense method, which applies the percentage of your home's square footage used for business to your real costs — rent or mortgage interest, utilities, insurance, repairs and depreciation — reported on Form 8829.

Self-employed people, freelancers, and small business owners choose between the two based on which yields the larger deduction: the simplified method is faster and requires no receipts, but caps out quickly for anyone with high housing costs, while the actual-expense method can produce a much larger deduction for someone with a sizable mortgage or rent but takes more recordkeeping.

This calculator estimates your deduction under both methods from your office square footage and home expenses, so you can compare the simplified $5-per-square-foot result against the actual-expense result before deciding which to claim.